The board of directors of Da Sen Holdings Group Limited informed the shareholders of the Company and potential investors that, based on the preliminary assessment of the unaudited consolidated financial information of the Group for the year ended 31 December 2019, the Group is expected to record a gross loss and net loss of not less than RMB 28.1 million and RMB 59.8 million respectively for the Period, as compared to a gross profit and net profit of approximately RMB 55.5 million and RMB 19.3 million respectively for the year ended 31 December 2018. The Board considers that the expected gross loss and net loss for the Period is mainly due to (i) the decrease in the sales prices of the Group's plywood products in the Period as a result of the Sino-US trade war and economic downturn in the People's Republic of China; (ii) the significant increase in the purchase costs of poplar plywood cores and wood residue, which are the major raw materials utilized for the Group's production of plywood products and biomass wood pellets respectively, in the Period due to a number of environmental protection measures being implemented by the Central People's Government of the PRC resulting in the increased production costs being transferred to the Group by its suppliers; (iii) the loss attributable to the write-off of some of the Group's inventories of plywood products for the Period due to the damage caused by flooding in July 2019 (details of which were set out in the Company's voluntary announcement dated 12 August 2019); (iv) the impairment loss of the Group's property, plant and equipment for the production lines of biomass wood pellets as a result of the declining market of biomass wood pellets during the Period; and (v) the loss on write-down of the Group's inventories of plywood products to their net realizable values as a result of the decrease in their sales prices during the Period.